1. Given the two projects below, identify which of the two projects are worth pursuing. The required rate of return is 10%. Project A ( 100,000 ) 45,000 45,000 45,000 Project B ( 100,000 ) 75,000 30,000 1,000 Year 1 2 3 Required: Compute for simple payback period, discounted payback period, net present value, profitability index, and internal rate of return.

1. Given the two projects below, identify which of the two projects are worth pursuing. The required rate of return is 10%. Project A ( 100,000 ) 45,000 45,000 45,000 Project B ( 100,000 ) 75,000 30,000 1,000 Year 1 2 3 Required: Compute for simple payback period, discounted payback period, net present value, profitability index, and internal rate of return.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 8P

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